DGGI seeks payment trail to crack down on illegal betting networks

New Delhi: The Directorate General of GST Intelligence (DGGI) has recommended mandatory recording of details of websites that direct users to make a payment, seeking to plug gaps in the financial system being exploited by illegal online gaming and betting networks.

The details sought would also include disclosure of all bank accounts linked to GST registration of such a website to build a consolidated map of accounts associated with an entity and identify accounts being used to receive, transfer or layer funds.

Officials aware of the recommendations said the mechanism could also help trace transactions associated with other illegal activities and identify intermediary accounts and payment networks used to route funds for other illicit activities.


The recommendations are part of a DGGI report on its 14-month probe into the illegal online gaming and betting network used for money laundering, submitted to the Central Board of Indirect Taxes and Customs (CBIC) earlier this month, people familiar with the matter said.

The agency's investigation detected a betting ecosystem estimated at ₹70,000 crore. The number reflects the total transactions detected in one financial year that continued to operate despite the ban on online money games by routing payments through intermediary merchant companies. The official did not specify the exact quantum of revenue loss and tax evasion as the investigation is still on.

"The board is discussing DGGI's findings and recommendations have been sent to the department of revenue for wider consultation," a senior official told ET.

The recommendations would require wider consultation as it could add compliance requirements for payment banks and aggregators, including customer due diligence, the official added.

DGGI has not yet specified which entity (the gaming platform, payment gateway, payment aggregator or bank) would be responsible for providing and maintaining the details sought, or how the originating website would be verified.

These issues are expected to be examined as the recommendations are discussed with wider stakeholders.

The Payment Filter

Under the DGGI proposal, a website that directs a user to make a payment would be recorded alongside the payment request.

Capturing this information for each relevant payment would allow investigators to directly link a transaction to the gaming platform that directed the user to make the payment, even where the money is routed through intermediaries.

Currently, payment banks and payment gateways record the merchant or entity receiving a payment. However, many illegal gaming websites use proxy merchant companies to collect funds, making it difficult to establish a direct link between the gaming platform and the entity receiving the money.

For instance, a user could place a bet on Website A but be directed to make a payment to Company B. The transaction may show Company B as the merchant, while investigators would have to separately establish that Company B was collecting money on behalf of Website A.

DGGI's investigation found that the existing system makes it difficult to establish the link between the gaming platform and the entity actually receiving the money.

India has imposed a ban on online money games and prohibits their advertising, promotion and facilitation. The Promotion and Regulation of Online Gaming Act, 2025, also prohibits banks, financial institutions and other entities facilitating financial transactions from processing payments for online money gaming services.

The DGGI investigation began as a probe into GST evasion by online money gaming companies but later expanded into a wider examination of the financial infrastructure supporting illegal betting and gaming operations.